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Self-Employment, Family Background, and Race

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Author Info
Michael Hout
Harvey S. Rosen

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Abstract

We focus on the intergenerational transmission of the propensity to be self-employed. Our emphasis is on the role of family background, and in particular, on what we call the intergenerational pick-up rate with respect to self-employment, the probability that a person with a self-employed parent will become self-employed him or herself. We use the General Social Survey, a data source with rich information on individuals' family histories, to investigate how family background affects self-employment probabilities and to document how racial and ethnic groups differ with respect to the intergenerational pick-up rate. We confirm earlier findings that father's self-employment status is an important determinant of offspring's self-employment outcomes. New results include: 1) The impact of paternal self-employment differs by race. 2) Even independent of father's occupation, family structure plays a role. 3) Blacks have lower self-employment rates than whites in part because they have different family structures; still, within each family type, blacks have lower self-employment rates. 4) Extrapolating current patterns into the future, there is no indication that black and white self-employment rates will converge any time soon. 5) The relatively high self-employment rates of immigrants carry into the next generation, but not beyond that. 6) Male immigrants who have self-employed fathers re no more likely to be self-employed than other immigrants.

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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 7344.

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Date of creation: Sep 1999
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Handle: RePEc:nbr:nberwo:7344

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Find related papers by JEL classification:
J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
J15 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Minorities and Races; Non-labor Discrimination

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References listed on IDEAS
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  1. Douglas Holtz-Eakin & David Joulfaian & Harvey S. Rosen, 1994. "Entrepreneurial Decisions and Liquidity Constraints," RAND Journal of Economics, The RAND Corporation, vol. 25(2), pages 334-347, Summer. [Downloadable!] (restricted)
    Other versions:
  2. Jovanovic, Boyan, 1982. "Selection and the Evolution of Industry," Econometrica, Econometric Society, vol. 50(3), pages 649-70, May. [Downloadable!] (restricted)
  3. Robert Kaestner, 1996. "Are Brothers Really Better? Sibling Sex Composition and Educational Achievement Revisited," NBER Working Papers 5521, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  4. Evans, David S & Jovanovic, Boyan, 1989. "An Estimated Model of Entrepreneurial Choice under Liquidity Constraints," Journal of Political Economy, University of Chicago Press, vol. 97(4), pages 808-27, August. [Downloadable!] (restricted)
  5. Lynn Elaine Browne & Geoffrey M.B. Tootell, 1995. "Mortgage lending in Boston: a response to the critics," New England Economic Review, Federal Reserve Bank of Boston, issue Sep, pages 53-78. [Downloadable!]
  6. Bernard F. Lentz & David N. Laband, 1990. "Entrepreneurial Success and Occupational Inheritance among Proprietors," Canadian Journal of Economics, Canadian Economics Association, vol. 23(3), pages 563-79, August. [Downloadable!] (restricted)
  7. Bruce D. Meyer, 1990. "Why Are There So Few Black Entrepreneurs?," NBER Working Papers 3537, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  8. Butcher, Kristin F & Case, Anne, 1994. "The Effect of Sibling Sex Composition on Women's Education and Earnings," The Quarterly Journal of Economics, MIT Press, vol. 109(3), pages 531-63, August. [Downloadable!] (restricted)
  9. Barton H. Hamilton, 2000. "Does Entrepreneurship Pay? An Empirical Analysis of the Returns to Self-Employment," Journal of Political Economy, University of Chicago Press, vol. 108(3), pages 604-631, June. [Downloadable!] (restricted)
  10. George J. Borjas & Stephen G. Bronars, 1989. "Consumer Discrimination and Self-Employment," NBER Working Papers 2627, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  11. Kihlstrom, Richard E & Laffont, Jean-Jacques, 1979. "A General Equilibrium Entrepreneurial Theory of Firm Formation Based on Risk Aversion," Journal of Political Economy, University of Chicago Press, vol. 87(4), pages 719-48, August. [Downloadable!] (restricted)
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Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Kevin Moore, 2004. "Do liquidity constraints matter for new entrepreneurs?," Finance and Economics Discussion Series 2004-42, Board of Governors of the Federal Reserve System (U.S.). [Downloadable!]
  2. Nathalie Colombier & David Masclet, 2008. "Intergenerational correlation in self employment: some further evidence from French ECHP data," Small Business Economics, Springer, vol. 30(4), pages 423-437, April. [Downloadable!] (restricted)
  3. Mats Hammarstedt, 2006. "The predicted earnings differential and immigrant self-employment in Sweden," Applied Economics, Taylor and Francis Journals, vol. 38(6), pages 619-630, April. [Downloadable!] (restricted)
  4. Kræn Blume Jensen & Mette Ejrnæs & Helena Skyt Nielsen & Allan Würtz, 2003. "Self-Employment among Immigrants: A Last Resort?," CAM Working Papers 2003-08, University of Copenhagen. Department of Economics. Centre for Applied Microeconometrics. [Downloadable!]
    Other versions:
  5. Magnus Lofstrom & Chunbei Wang, 2006. "Mexican-Hispanic Self-Employment Entry: The Role of Business Start-Up Constraints," IZA Discussion Papers 2422, Institute for the Study of Labor (IZA). [Downloadable!]
  6. Fairlie, Robert W. & Robb, Alicia M., 2008. "Gender Differences in Business Performance: Evidence from the Characteristics of Business Owners Survey," IZA Discussion Papers 3718, Institute for the Study of Labor (IZA). [Downloadable!]
  7. Pernilla Andersson & Eskil Wadensjö, 2006. "Employees Who Become Self-Employed: Do Labour Income and Wages Have an Impact?," IZA Discussion Papers 1971, Institute for the Study of Labor (IZA). [Downloadable!]
  8. Amelie Constant & Klaus F. Zimmermann, 2004. "Occupational Choice across Generations," Discussion Papers of DIW Berlin 395, DIW Berlin, German Institute for Economic Research. [Downloadable!]
    Other versions:
  9. Yannis Georgellis & Howard J. Wall, 2004. "Gender differences in self-employment," Working Papers 1999-008, Federal Reserve Bank of St. Louis. [Downloadable!]
    Other versions:
  10. Uwaifo Oyelere, Ruth & Belton, Willie, 2008. "The Role of Information and Institutions in Understanding the Black-White Gap in Self-Employment," IZA Discussion Papers 3761, Institute for the Study of Labor (IZA). [Downloadable!]
  11. Phillip Kim & Howard Aldrich & Lisa Keister, 2006. "Access (Not) Denied: The Impact of Financial, Human, and Cultural Capital on Entrepreneurial Entryin the United States," Small Business Economics, Springer, vol. 27(1), pages 5-22, August. [Downloadable!] (restricted)
  12. Nzinga Broussard & Ralph Chami & Gregory Hess, 2003. "(Why) Do Self-Employed Parents Have More Children?," CESifo Working Paper Series CESifo Working Paper No. , CESifo Group Munich. [Downloadable!]
  13. Isabel Grilo & Roy Thurik, 2005. "Entrepreneurial engagement levels in the European Union," Papers on Entrepreneurship, Growth and Public Policy 2005-29, Max Planck Institute of Economics, Entrepreneurship, Growth and Public Policy Group. [Downloadable!]
    Other versions:
  14. Yannis Georgellis & Howard J. Wall, 2006. "Entrepreneurship and the policy environment," Review, Federal Reserve Bank of St. Louis, issue Mar, pages 95-112. [Downloadable!]
    Other versions:
  15. Amelie Constant & Yochanan Shachmurove, 2005. "The comparison of incomes of self-employed and salaried workers among German Nationals and immigrants," PIER Working Paper Archive 05-030, Penn Institute for Economic Research, Department of Economics, University of Pennsylvania. [Downloadable!]
  16. Sarah Brown & Lisa Farrell & Mark N. Harris, 2003. "Who are the Self-employed? A New Approach," Monash Econometrics and Business Statistics Working Papers 11/03, Monash University, Department of Econometrics and Business Statistics. [Downloadable!]
    Other versions:
  17. P. Köllinger & M. Minniti, 2006. "Not for Lack of Trying: American Entrepreneurship in Black and White," Small Business Economics, Springer, vol. 27(1), pages 59-79, August. [Downloadable!] (restricted)
    Other versions:
  18. Peake, Whitney O. & Marshall, Maria I., 2009. "Has the "Farm Problem" Disappeared? A Comparison of Household and Self-Employment Income Levels of the Farm and Nonfarm Self-Employed," 2009 Annual Meeting, January 31-February 3, 2009, Atlanta, Georgia 46304, Southern Agricultural Economics Association. [Downloadable!]
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